The Company leases certain manufacturing and office facilities, land, vehicles, and equipment. The terms of these leases vary widely, although most have terms between 3 and 10 years.

In accordance with ASC 842, Leases, the Company recognizes a “right-of-use” asset and related lease liability at the commencement date of each lease based on the present value of the fixed lease payments over the expected lease term inclusive of any rent escalation provisions or incentives received. The lease term for this purpose will include any renewal period where the Company determines that it is reasonably certain that it will exercise the option to renew. While certain leases also permit the Company to terminate the lease in advance of the nominal term upon payment of an associated penalty, the Company generally does not take into account potential early termination dates in its determination of the lease term as it is reasonably certain not to exercise an early-termination option as of the lease commencement date.

The Company uses its incremental borrowing rate, which represents the interest rate the Company would expect to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms, in order to calculate the present value of a lease, when the implicit discount rate for its leases is not readily determinable.

For operating leases, fixed lease payments are recognized as operating lease expense on straight-line basis over the lease term. For finance leases, the Company recognizes depreciation expense associated with the leased asset acquired and interest expense related to the financing portion. Variable payments are recognized in the period incurred. As permitted by ASC 842, the Company has elected not to separate those components of a lease agreement not related to the leasing of an asset from those components that are related.

The Company does not record leases with an initial lease term of 12 months or less on its consolidated balance sheets. The Company recognizes lease expense for these short-term leases on a straight-line basis over the lease term.

Supplemental information concerning the leases recorded in the Company's consolidated balance sheet as of June 30, 2022 is detailed in the following table:


(Dollars in millions)	Line item in the consolidated balance sheet	Balance at June 30, 2022
Right-of-use assets:
Finance leases	Property, plant, and equipment, net	$	178
Operating leases	Other long-term assets	93

Current lease liabilities:
Finance leases	Current portion of long-term obligations and other short-term borrowings	17
Operating leases	Other accrued liabilities	14

Non-current lease liabilities:
Finance leases	Long-term obligations, less current portion	217
Operating leases	Other liabilities	$	85

The components of the net lease costs for the fiscal year ended June 30, 2022 reflected in the Company's consolidated statement of operations were as follows:


(Dollars in millions)	Fiscal Year Ended June 30, 2022
Financing lease costs:
Amortization of right-of-use assets	$	17
Interest on lease liabilities	12
Total	29

Operating lease costs	28
Variable lease costs	8
Total lease costs	$	65

The weighted average remaining lease term and weighted average discount rate related to the Company's right-of-use assets and lease liabilities as of June 30, 2022 are as follows:

Supplemental information concerning the cash-flow impact arising from the Company's leases for the fiscal year ended June 30, 2022 recorded in the Company's unaudited consolidated statement of cash flows is detailed in the following table (in

millions):


	Fiscal Year Ended June 30, 2022
Cash paid for amounts included in lease liabilities:
Financing cash flows used for finance leases	$	15
Operating cash flows used for finance leases	11
Operating cash flows used for operating leases	19

Non-cash transactions:
Right-of-use assets obtained in exchange for new finance lease liabilities	59
Right-of-use assets obtained in exchange for new operating lease liabilities	$	31


(Dollars in millions)	Financing Leases		Operating Leases		Total
2023	$	29	$	17	$	46
2024	28		14		42
2025	25		11		36
2026	22		11		33
2027	22		11		33
Thereafter	238		74		312
Total minimum lease payments	364		138		502
Less: interest	130		39		169
Total lease liabilities	$	234	$	99	$	333